2023 Will Be Harder Than 2022: Hornbach

The video discusses the challenges markets face post-pandemic, focusing on inflation and policy changes. It explores conviction views for early 2023, highlighting trends and opportunities, particularly in the U.S. dollar and curve steepeners. The discussion includes potential recession risks and the dollar's role as a diversifier in a risk-off environment. The dollar's correlation with financial and real assets is examined, with a modest positive outlook for 2023.

What is the main challenge to the consensus views among investors and central bankers?

• Policy will be less restrictive post-pandemic.

• Markets and data are challenging the consensus views.

• Investors are more optimistic about inflation.

• Post-pandemic inflation will be similar to pre-pandemic inflation.

What is the conviction view for the first three to six months of 2023?

• Buying the dollar and avoiding duration.

• Selling the dollar and embracing duration.

• Avoiding all financial markets.

• Investing in equities and commodities.

What could happen to the dollar if a recession occurs in 2023?

• The dollar could strengthen as a safe haven.

• The dollar will lose its status as a diversifier.

• The dollar will weaken significantly.

• The dollar will remain stable.

How is the dollar correlated with financial and real assets?

• Negatively correlated.

• Not correlated at all.

• Correlated only with real assets.

• Positively correlated.

What is the expected impact on the dollar if there is another sell-off in equities or risk assets?

• The dollar will likely decrease in value.

• The dollar will become more volatile.

• The dollar could push higher.

• The dollar will remain unaffected.